Yelp Soars on Qype Purchase as Sales Exceed Estimates

Oct. 24 (Bloomberg) -- Yelp Inc., a U.S. website that lets
users review businesses ranging from plumbers to pet shops,
surged the most in two months after announcing an acquisition to
expand in Europe and reporting sales that topped estimates.

The shares advanced 7.4 percent to $25.77 at the close in
New York. Yelp, based in San Francisco-based, has increased 72
percent since its initial public offering in March.

Yelp said third-quarter sales will be about $36.4 million,
exceeding its prior forecast and more than analysts’ average
$35.7 million estimate, according to data compiled by Bloomberg.
The company also said it acquired Qype GmbH, Europe’s biggest
local review website, for about $50 million to expand beyond its
U.S. base and step up competition with Google Inc. and Facebook
Inc. for users and advertisers.

“The Qype deal should help Yelp accelerate its expansion
into Europe,” Tom White, an analyst at Macquarie Capital USA
Inc., wrote in a research report today.

Third-quarter adjusted earnings before interest, taxes,
depreciation and amortization will be about $2.2 million, more
than double White’s estimate of $1 million.

Started by Chief Executive Officer Jeremy Stoppelman in
2004, Yelp is working to add mobile features and using a
partnership with Apple Inc. to integrate local content into
software for the iPhone and iPad devices. Qype, like Yelp, makes
money from ads local businesses buy that appear within search
results.

“We have built a solid foundation in Europe, and this
acquisition should significantly increase our international
presence,” Stoppelman said in the statement. “Qype will help
Yelp become the de facto choice” for local information searches
in Britain and Germany.

Closely held Qype, founded in Hamburg in 2006 and with
operations in Germany and the U.K., has about 15 million unique
visitors every month in 13 countries, according to the
statement. That adds to the 78 million unique visitors Yelp
reported in the three months through June.

Yelp will report complete third-quarter financial results
and provide a forecast for the current period on Nov. 1.